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California Fires Blamed on Utility Company, Findings Bankrupt Company

As Pacific Gas and Electric faces liability claims worth billions of dollars from two years of California wildfires, the company says it will pursue bankruptcy as “the only viable option.”

Pacific Gas & Electric, the largest investor-owned utility company in California, announced on Monday that it plans to declare bankruptcy since its stock price plunged after the initial findings of an investigation into the California fires were released. Just the day before the company made the announcement, CEO Geisha Williams said that she would resign from her position.

Is PG&E Responsible for Some of the Wildfires?

Cal Fire, California’s fire agency, established last June that PG&E equipment caused 17 of the wildfires that spread across Northern California in 2017. Cal Fire referred its findings for 12 of those fires to various county District Attorneys’ offices, citing possible state law violations.

According to PG&E’s filing with the Securities and Exchange Commission on Monday, the company’s liability could surpass $30 billion if it’s found responsible for any costs associated with the 2017 and 2018 Northern California wildfires. Not included in that total are damages, fines or penalties related to future claims.

On Monday, PG&E’s new interim CEO John Simon said in a statement: “We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion. We expect this process also will enable PG&E to access the capital and resources we need to continue providing our customers with safe service and investing in our systems and infrastructure.”

Currently, officials are investigating the utility company’s potential blame in the deadliest blaze in state history, November’s Camp Fire, which completely destroyed the town of Paradise.

According to California law, utility companies can be held liable for any fire damage caused by equipment, regardless of the condition of the equipment.

How Will PG&E’s Announcement and Eventual Bankruptcy Affect Its Customers?

Although the company says that the decision to declare bankruptcy should not affect the service to 16 million customers, hundreds of wildfire victims who have sued PG&E are wondering whether they will ever be indemnified.

A federal judge responsible for directing the company’s probation in regard to a gas line explosion in 2010 ordered PG&E to start the process of removing or trimming trees near power lines and re-inspecting its electrical grid.

“Throughout the months ahead, I will be working with the Legislature and all stakeholders on a solution that ensures consumers have access to safe, affordable and reliable service, fire victims are treated fairly, and California can continue to make progress toward our climate goals,” California Gov. Gavin Newsom said in a statement.

Newsom said in the statement that the company should honor their commitments made to their customers as well as energy suppliers.

Ron Williams, lead plaintiff in an investor suit that was filed in November, said the Camp Fire’s $17 billion in estimated damages means that claims “will likely exceed the company’s $1.4 billion insurance policy.”

The Camp Fire killed 85 people and destroyed more than 12,000 buildings. Although the cause is still under investigation, many homeowners had complained for some time of faulty PG&E equipment in the area where the fire ignited.

PG&E said in a news release on Monday that it is committed to continuing its restoration and rebuilding efforts, as well as assisting those affected by the Northern California wildfires.


Leighanna Shirey

Leighanna graduated with a degree in English from Pensacola Christian College. After teaching high school English for five years, she decided to pursue her dream of writing and editing. When not working, she enjoys traveling with her husband, spending time with her dogs, and drinking way too much coffee.

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